MP suggests tax on petrol profits

An MP has called for a windfall tax to be imposed on petrol station owners if they do not act to reduce fuel prices.

Nigel Evans said that the plunge in oil prices means the cost of petrol should be about £1 a litre, and that companies who are not passing on the cut to "hard-pressed" motorists should be punished.

Speaking in the House of Commons, the Ribble Valley MP called for a Parliamentary debate in a bid to put pressure on petrol station owners, and for consideration of a windfall tax on profits.

Brent crude is being traded at less than 50 dollars a barrel, the lowest level in six years, and Sainsbury's chief Mike Coupe has predicted fuel prices will drop below the milestone £1 a litre mark following recent falls at the pumps.

But Mr Evans said prices have "not dropped enough" and he urged Commons Leader William Hague to make sure action is taken.

In response, Mr Hague said the Government was monitoring prices at petrol stations, as well as energy bills and the cost of air fares.

RAC fuel spokesman Simon Williams said: "From what we've seen in recent weeks, petrol retailers are certainly passing on the cuts in the price of crude oil to customers at the pump, who are now paying around 16% less on average per litre than they were at the start of 2014.

"The suggestion that prices rise like a rocket and fall like a feather is just not true anymore and in fact it is within the Government's power to cut prices further by reducing the share of tax paid per litre - currently 66% of what motorists pay at the pumps on petrol goes straight to the Treasury, one of the highest taxation levels in the world.

"With diesel, however, that rises to 69%. And, if petrol falls to £1 a litre, 75% of the cost would be tax."